What should one be looking out for when choosing a spread trading firm? Tight spreads or an established provider? A solid and reliable trading platform? Spread Betting providers need to make a profit on trades, irrespective of whether the client wins or loses, so a margin is inevitable and you do want your broker to charge you the spread as you want them to also make money. So as a general rule seek fair and competitive spreads but also good execution.
One comment about the size of the bid-offer spread though. Competitive spreads are important and obviously you have to look at the whole package on offer – if you are trading many times a day the spread will impact your profit margins but it is not worth the risk of poor service. History (highlight: WorldSpreads) has shown us time and again in many financial fields that cheapest is very rarely the best. Weaker providers tend to have to undercut heavily to obtain clients.
Spreads are something to consider, but so are customer support, trading platform, system reliability, resources, financial strength, etc
Margins on shares and the range of stocks on offer can be quite telling. You can for instance check the small illiquid small stocks and if margins undercut the average norm in the industry then it might indicate a lack of hedging as the client margin may well be lower than the clearers margin. Not hedging small caps would be a concern.
Thing is that when it comes to trading, a lot of emphasis is made about the bottom line but that doesn’t give the whole truth. Sure, to succeed in your quest of maximising your returns, you need to keep costs to a minimum, but you also need a reliable platform where you can get your trades on without delay. In other words do you want your spread betting broker to compete on gimmicks or on having a good platform with fair execution? Gimmick are for punters. Aren’t we aiming to be professionals?
“You must do your own independent research on the quality of the spread betting trading platforms that are currently available. If possible, you should trial a spread betting provider’s platform before opening an account.”
Having said all that, having an account is a must and the sooner you go through the processes then, of course the sooner you will be able to trade. I would suggest first testing two or three platforms by signing up to a couple of training, or dummy accounts in order to get a feel not only for the site but for trading itself. We have an excellent relationship with the largest spread betting companies. This is beneficial to you, because we are able to tell you which company offers what, introducing you to cheaper trading, narrowing your spreads. What’s more, because of our established connections we can even offer you special offers that aren’t available from anywhere else. No other company is able to do this for you.